IN THE COURT OF APPEALS OF TENNESSEE
WESTERN SECTION AT JACKSON
______________________________________________
ANDREA Y. JOHNSON,
Plaintiff-Appellee,
Shelby Circuit No. 127514 R.D.
Vs. C.A. No. 02A01-9608-CH-00194
CLINISSON A. JOHNSON, FILED
Defendant-Appellant. July 31, 1997
____________________________________________________________________________
Cecil Crowson, Jr.
THE HONORABLE JOE C. MORRIS, CHANCELLOR Appellate C ourt Clerk
Sitting By Designation
Mimi Phillips; Phillips, Howard & Grubb of Memphis
For Appellee
A. C. Wharton, Jr.; Wharton & Wharton & Associates of Memphis
For Appellant
AFFIRMED
Opinion filed:
W. FRANK CRAWFORD,
PRESIDING JUDGE, W.S.
CONCUR:
ALAN E. HIGHERS, JUDGE
DAVID R. FARMER, JUDGE
This appeal involves a post-divorce petition. Defendant, Clinisson A. Johnson
(Husband), appeals from the judgment of the trial court ordering the immediate payment of
Husband’s pension awarded in the trial court’s prior distribution of the marital property and
awarding attorney’s fees to plaintiff, Andrea Y. Johnson (Wife).
The parties were divorced by final decree entered April 17, 1990, ending a marriage of
sixteen years. The divorce was granted to both parties on the grounds of irreconcilable
differences. The parties entered into a marital dissolution agreement, which was approved and
incorporated into the final decree by the trial court.
During the marriage, the parties owned a residence valued at $75,000.00, household
furnishings worth approximately $2,000.00, and two cars with an undisclosed value. Pursuant
to the martial dissolution agreement, Wife was entitled to purchase Husband’s equity in the
residence, and after consummation of the sale, Wife was to become the sole owner of the
residence. She was also responsible for both mortgages. Wife was awarded one of the
automobiles and the household furnishings in the residence. Husband was awarded his personal
property in his separate residence and the other automobile.
Husband is employed by the Shelby County Government. It appears from the record that
Husband’s monthly take home salary is $4,795.35. Wife’s net monthly income is $1,520.00.
Wife has custody of the parties’ three minor children.
The parties each filed multiple petitions for contempt against the other at various stages
of the divorce proceedings. The parties appeared before the trial court numerous times, both
before and after the entry of the final decree of divorce. Finally, on June 26, 1995, Wife filed
a petition titled “Petition to Reduce Claim to Final Judgment for Breach of Contract.” In the
petition, Wife alleges that Husband failed to pay her the one-half of his pension that she was
awarded pursuant to the marital dissolution agreement. She claims that she is entitled to
$4,424.06 from Husband’s pension and that she is owed interest on that amount at the rate of
$1.21 per day.
The marital dissolution agreement states in pertinent part:
The Second Party (Husband) is the owner of a pension vested by
way of his employment with the City of Memphis and Shelby
County Government. It is agreed that the party of the first party
[sic] (Wife) is entitled to ½ the value of this pension as of April
11, 1990 and that said entitlement shall be based upon the period
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of marriage of the parties May 5, 1973 to April 10, 1990, with
said benefits being based only on those that accrued during the
term of the marriage. First Party waives and relinquishes any
claim or rights of any type to the other ½ of the Second Party’s
interest in his pension.
After a hearing on January 26, 1996,1 the trial court entered an order in favor of Wife.
In its order, the trial court found, inter alia, that Wife was entitled to $4,424.06 of Husband’s
Shelby County Government Pension that was awarded originally in the marital dissolution
agreement. The trial court also awarded interest in the amount of $1.21 per day. In the order,
the trial court stated in pertinent part:
[T]he Court specifically finds that the Plaintiff became entitled to
receive the portion of Defendant’s pension awarded to her at the
time the Final Decree of Divorce was entered, and, accordingly,
that she is also entitled to interest on the principal amount from
and after April 17, 1990, the date on which the Final Decree of
Divorce was entered, as is more specifically set. The Court
specifically finds that simple interest on the principal amount has
accrued at the rate of $1.21 a day, and that as of January 26, 1996
judgment has accrued in the amount of $2,493.12, for a total
judgment of principal and interest of $6,917.18.
The trial court also awarded attorney’s fees, incurred from February 1994 until the date of the
hearing in the amount of $7,010.29, to Wife that she paid “to secure the Defendant’s compliance
with Orders of this Court.”
Husband appeals the judgment of the trial court and presents two issues for
review: 1) whether the trial court erred by ordering the immediate payment of Husband’s
pension benefits to Wife, and 2) whether the trial court erred in awarding attorney’s fees to Wife.
Since this case was tried by the court sitting without a jury, we review the case de novo
upon the record with a presumption of correctness of the findings of fact by the trial court.
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The trial court heard arguments concerning other petitions, as well as Wife’s June
26, 1995 petition. The only issues relevant to this appeal concern Husband’s pension and the
award of attorney’s fees.
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Unless the evidence preponderates against the findings, we must affirm, absent error of law.
T.R.A.P. 13(d).
In his first issue, Husband does not dispute that Wife is entitled to one-half of his pension
pursuant to the marital dissolution agreement, and he concedes that pension benefits are marital
property. See T.C.A. § 36-4-121(b)(1)(B) (1996); Cohen v. Cohen, 937 S.W.2d 823, 830
(Tenn. 1996). However, Husband argues that Wife is not entitled to an immediate distribution
of one-half of his pension benefits. First, Husband argues that Tennessee courts recognize two
methods of valuing and distributing pensions and that the trial court in this case used the wrong
method. In Cohen, the Tennessee Supreme Court discussed the valuation and distribution of
pension benefits:
The difficulty in dividing future benefits is aided by the use of
elastic, equitable approaches. Most courts use one of two
techniques. The first approach, known as the present cash value
method, requires the trial court to place a present value on the
retirement benefit as of the date of the final decree. To determine
the present cash value, the anticipated number of months the
employee spouse will collect the benefits (based on life
expectancy) is multiplied by the current retirement benefit
payable under the plan. This gross benefit figure is then
discounted to present value allowing for various factors such as
mortality, interest, inflation, and any applicable taxes. Once the
present cash value is calculated, the court may award the
retirement benefits to the employee-spouse and offset that award
by distributing to the other spouse some portion of the marital
estate that is equivalent to the spouse’s share of the retirement
interest. The present cash value method is preferable if the
employee-spouse’s retirement benefits can be accurately valued,
if retirement is likely to occur in the near future, and if the marital
estate includes sufficient assets to offset the award.
In other circumstances in which the vesting or maturation is
uncertain or in which the retirement benefit is the parties’ greatest
or only economic asset, courts have used the “deferred
distribution” or “retained jurisdiction” method to distribute
unvested retirement benefits. This method has distinct
advantages when the risk of forfeiture is great. Under such an
approach, it is unnecessary to determine the present value of the
retirement benefit. Rather, the court may determine the formula
for dividing the monthly benefit at the time of the decree, but
delay the actual distribution until the benefits become payable.
The marital property interest is often expressed as a fraction or a
percentage of the employee spouse’s monthly benefit. The
percentage may be derived by dividing the number of months of
the marriage during which the benefits accrued by the total
number of months during which the retirement benefits
accumulate before being paid.
One advantage to the deferred distribution method is that it
allows an equitable division without requiring present payment
for a benefit not yet realized and potentially never obtained.
Another advantage to the approach is that it equally apportions
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any risk of forfeiture. While a disadvantage may be that the
approach requires a trial court to retain jurisdiction to oversee the
payment, the entry of an order awarding a certain percentage of
the benefits at the time of payment should lessen the
administrative burden of the court. Courts routinely retain
jurisdiction to supervise payments of alimony and child support
and have, in the past, successfully divided vested pension rights
by awarding each spouse a share. An administrative burden
should not excuse an inequitable distribution of marital property.
Cohen, 937 S.W.2d at 831 (citations omitted).
Husband argues that the marital estate has been overextended and that there are
insufficient funds from which to offset an immediate judgment of one-half of his pension. He
asserts that the distribution of the pension benefits should be in accordance with the “delayed
distribution” or “retained jurisdiction” method.
The choice of valuation method remains within the sound discretion of the trial court to
determine after consideration of all relevant factors and circumstances. Cohen, 937 S.W.2d at
831. We believe that the trial court properly exercised its discretion in choosing the “present
cash value” method. First, vesting or maturation of Husband’s pension is certain, and the parties
easily determined the present value of the pension benefits at the time of the divorce. The
pension benefits were accurately valued at $8,848.12, with Wife’s one-half share as $4,424.06.
In addition, the pension benefits are not the parties’ only or greatest asset. We believe that, in
light of Husband’s monthly net income, there are sufficient funds from which to offset an
immediate judgment of the pension.
Husband next argues that state pension benefits are protected from execution, attachment,
or garnishment by statute. T.C.A. § 26-2-104 (a) provides as follows:
All moneys received by a resident of the state, as pension from
the state of Tennessee, or any subdivision or municipality thereof,
before receipt, or while in his hands or upon deposit in the bank,
shall be exempt from execution, attachment or garnishment other
than an order for assignment of support issued under § 36-5-501,
whether such pensioner is the head of a family or not.
T.C.A. § 26-2-104 (a) (Supp. 1996). Husband argues that the trial court subjected his pension
funds to “execution, attachment or garnishment” because he has no other funds from which to
satisfy the judgment. He asserts that the trial court did not order him to “cash out or borrow
against” his pension, and therefore, he is protected by statute.
In Boyd v. Boyd, No. 02A01-9210-CH-00294, 1993 WL 8379 (Tenn. App. Jan. 20,
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1993), this Court considered the effect of T.C.A. § 26-2-104(a) on the distribution of pension
benefits in a divorce action:
The statute clearly renders exempt from execution, attachment or
garnishment all money received by a resident of the state as a
pension from the State of Tennessee. Coke v. Coke, 560 S.W.2d
631 (Tenn. App. 1977). However, we do not construe the statute
to mean that the court in a divorce action is prohibited from
making an award to the other spouse. T.C.A. § 36-4-121(b)(1)(B)
does not exclude a state employee’s pension from the definition
of marital property.
Boyd, 1993 WL 8379, at *2. The Court found that the evidence did not preponderate against the
trial court’s findings and allowed the distribution. Id. However, the distribution was not to be
made until the husband’s retirement. Id.
In Malik v. Malik, No. 02A01-9604-CH-00070, 1996 WL 560257 (Tenn. App. Oct. 3,
1996), this Court again considered T.C.A. § 26-2-104(a). The Malik Court followed the holding
in Boyd and stated:
We agree with both the analysis and the conclusion of the Boyd
decision. Tennessee Code Annotated § 26-2-104(a) prohibits the
“execution, attachment, or garnishment” of state pension funds.
In this case, however, the trial court ordered husband to cash out
and/or borrow against such funds. Thus, the funds were not
subject to “execution, attachment, or garnishment,” or any other
judicial process.
Malik, 1996 WL 560257, at *3. This Court affirmed the trial court’s order for the husband to
cash out or borrow against his pension fund to pay the wife her share of the pension fund from
the division of the marital assets. Id.
In this case, Husband argues that Malik is distinguishable because the trial court did not
order him to “cash out” or “borrow against” his pension fund, but instead subjected the pension
benefits to “execution, attachment or garnishment.” We do not believe that Malik requires the
trial court to use such magic language to overcome T.C.A. § 26-2-104(a). In that case, the wife
did not have to wait until the husband’s retirement to receive her share of his pension. Malik,
1996 WL 560257, at *2. In this case, the trial court stated, “[T]he Court specifically finds that
the Plaintiff became entitled to receive the portion of Defendant’s pension awarded to her at the
time the Final Decree of Divorce was entered.”
We do not believe that the trial court subjected Husband’s pension benefits to “execution,
attachment or garnishment.” The trial court’s order clearly states that Wife was entitled to
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receive her share of the pension at the time the final decree was entered. We interpret the trial
court’s order to mean that Husband must pay that amount, $4,424.06, to Wife and should have
done it at the time the divorce became final. Husband may have to cash out or borrow against
the pension fund, but the pension is not subject to “execution, attachment or garnishment.”
Husband next argues that the trial court provided no factual basis for the order of
immediate payment of the pension benefits. Husband argues that it is inequitable for the Wife
to enforce and add to the marital dissolution agreement six years after its entry. Husband also
argues that the trial court made the order without taking into consideration the relevant factors
in T.C.A. § 36-4-121(c).
We believe that the trial court was called upon to interpret the marital dissolution
agreement that was part of the final decree of divorce. The trial court did not need a factual basis
to determine whether, as a matter of law, Wife was entitled to the pension benefits immediately
or upon Husband’s retirement. For the same reasons, the trial court did not have to consider the
factors in T.C.A. § 36-4-121(c). Those are the factors that the trial court considered in making
the equitable division in the first place. They have no bearing on when the equitable division
is payable. We disagree with Husband that it is inequitable to enforce a six-year-old marital
dissolution agreement. The trial court found that Husband should have paid Wife’s share of the
pension benefits six years ago, and because Husband owes Wife $4,424.06, there is nothing
inequitable in enforcing the agreed upon division of the marital property.
In conclusion, the trial court did not abuse its discretion by applying the “present cash
value” method, and the evidence does not preponderate against the trial court’s findings. Wife
is entitled to $4,424.06 of Husband’s pension benefits, plus interest as awarded by the trial court.
In his second issue, Husband contends that the trial court erred in awarding Wife
$7,010.29 in attorney’s fees. He argues that he is in no better financial position than Wife to pay
her attorney’s fees. Instead, he asserts that, in the interest of equity, each party should be held
responsible for his or her own attorney’s fees.
The law in Tennessee is clear that the trial court has wide discretion in awarding
attorney’s fees, and unless the evidence preponderates otherwise, the award will not be disturbed
on appeal. Kincaid v. Kincaid, 912 S.W.2d 140, 144 (Tenn. App. 1995). An award of attorney’s
fees is appropriate only when the spouse seeking them lacks sufficient funds to pay his or her
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own legal expenses or would be required to deplete his or her resources in order to pay these
expenses. Brown v. Brown, 913 S.W.2d 163, 170 (Tenn. App. 1994).
As stated previously, the record shows that Husband’s net monthly income is $4,795.35,
and Wife’s net monthly income is $1,520.00. In the case at bar, we believe that Husband has the
ability to pay the award, and we cannot say that the evidence preponderates against the award
of attorney’s fees to Wife.
Accordingly, the judgment of the trial court is affirmed in all respects. Costs of this
appeal are assessed against the appellant.
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